Shares of IBM (IBM) - Get Report are scheduled to trade ex-dividend Monday, Feb. 8. To qualify for a dividend check, investors must have purchased shares of the Armonk, N.Y.-based tech bellwether before its ex-dividend date, when IBM management will finalize its roster of shareholders to whom it will send dividend checks.

IBM stock -- trading at around $127 -- has been under pressure for a long time, falling 7.6% year to date and 19.4% over the past 12 months. And if you've held IBM shares over the past three years, you're in the hole 38%. But the company does pay a fat dividend of 4.09%, which has helped investors offset the decline in the share price.

IBM's yield is more than twice the 2% average yield paid out by the average stock in the S&P 500 (SPX) index. And that's why IBM's yield is too attractive to pass up if you are playing the "buy the dividends" strategy, in which investors buy stocks for the sole purpose of collecting the announced quarterly dividend and then sell the stock within days after the dividend cash payment has been paid.

It can be a lucrative strategy, but it's one that requires excellent timing. In this case, IBM, which pays a $1.30 a share quarterly dividend, will send it out its dividend checks on March 10 to shareholders of record as of Wednesday, Feb. 10. This quarter will mark the fifth straight period during which IBM would have paid its $1.30 payout since raising its dividend some 136%, from 55 cents, six years ago.

Holding beyond the dividend payment can also be a smart move. With IBM stock now trading at around $127, its share price is almost half of where it was three years ago when the company reached its all-time intraday high of $215.90. Since then, the shares are down 42%.

Nonetheless, IBM has great cash flow-generating ability ($17 billion in last four quarters). Recent maneuvers to better compete in the realm of Big Data, the cloud and analytics -- areas that generate higher profits margin -- have also helped. The potential reward is greater than the risks, in my view.

And just to highlight how low the risk is: IBM stock is priced at nine times fiscal 2016 estimates of $13.51 and eight times fiscal 2017 estimates of $14.14,. Both forward price-to-earnings estimates below the P/E of 17 of the average stock in the S&P 500 index. And IBM's fiscal 2017 estimates call for a return to earnings growth of almost 5%, after years of declines.

Investors looking for beaten-down stock with upside potential in the next 12 to 18 months can do well here, as can those looking for a strong dividend yield.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.